Form 121 is the declaration you now give a bank, post office or company so that it does not deduct tax at source from your interest, dividend or similar income. Since 1 April 2026 it has replaced both Form 15G and Form 15H: the Income Tax Department’s guidance note on Form No. 121 maps the old forms and old rule 29C to the new form, section 393(6) of the Income-tax Act, 2025 and rule 211 of the Income-tax Rules, 2026.
The merger did not merge the eligibility test. Someone below 60 still has to pass two conditions, a senior citizen only one, and the gap between them matters more now that the new regime’s ₹12 lakh rebate makes many people’s tax nil. The examples below show who can sign the form honestly and who cannot.
The two conditions, side by side
The department’s Form 121 FAQs set out the test, and the notes printed on the form itself (see SBI’s copy of Form No. 121) tell the payer how to apply it:
| Who is declaring | Condition 1: tax on estimated total income for the year | Condition 2: the income covered by the declarations |
|---|---|---|
| Resident individual below 60, HUF, trust or other person that is not a company or firm | Must be nil | Must not exceed the maximum amount not chargeable to tax |
| Resident individual aged 60 or more at any time in the tax year | Must be nil | Does not apply |
Two details in the form’s notes decide most cases. Note 10 says estimated total income is worked out after Chapter VIII deductions, house property loss set-off and the rebate under section 156. Note 11 says that for anyone other than a resident senior citizen, the payer “shall not accept the declaration” where the income of the kind covered by section 393(6) exceeds the maximum amount not chargeable to tax.
Under the new regime, the nil slab in section 202(1) runs to ₹4 lakh, and section 156(2) gives a resident individual a rebate of the full tax, up to ₹60,000, when total income does not exceed ₹12 lakh (Income-tax Act, 2025 as amended by Finance Act 2026). The full slab table and the old-regime limits are on our income tax calculator. So a person below 60 can have nil tax after the rebate and still fail condition 2 because their interest alone is above ₹4 lakh.
Four worked cases for tax year 2026-27
All four assume the new regime, residence in India, no capital gains and no other income beyond what is listed. Interest TDS thresholds come from the section 393 table: a bank, co-operative bank or post office deducts once interest in the year crosses ₹50,000, or ₹1,00,000 for a senior citizen, at 10%, the rate for resident interest in the department’s TDS rate table.
| Neha, 42 | Arjun, 38 | Kamala, 67 | Kamala, 67, bigger deposit | |
|---|---|---|---|---|
| Pension | — | — | ₹6,00,000 | ₹6,00,000 |
| Standard deduction | — | — | ₹75,000 | ₹75,000 |
| Fixed deposit interest | ₹3,20,000 | ₹6,00,000 | ₹5,00,000 | ₹6,25,000 |
| Total income | ₹3,20,000 | ₹6,00,000 | ₹10,25,000 | ₹11,50,000 |
| Slab tax before rebate | Nil | ₹10,000 | ₹42,500 | ₹55,000 |
| Tax after section 156 rebate | Nil | Nil | Nil | Nil |
| Interest within ₹4 lakh? | Yes | No | Not tested | Not tested |
| Can give Form 121? | Yes | No | Yes | Yes |
| TDS without the form | ₹32,000 | ₹60,000 | ₹50,000 | ₹62,500 |
Neha passes both conditions. Without the form her bank would deduct ₹32,000, which she could only recover as a refund after filing her return.
Arjun owes no tax once the rebate applies, but his ₹6 lakh of interest is above the ₹4 lakh limit, so note 11 bars the bank from accepting his declaration. The bank deducts ₹60,000 and he claims it back in his return. Signing the form anyway is not a shortcut: note 12 warns that a false statement in the declaration can lead to prosecution under section 482.
Kamala clears the only test that applies to her. Her slab tax is 5% of ₹4 lakh plus 10% of ₹2.25 lakh, and the rebate wipes it out.
The last column is close to the edge. Add another ₹75,000 of interest and her total income becomes ₹12,25,000: tax under the slabs would be ₹63,750 and marginal relief would still leave ₹25,000 payable, so a senior at that level cannot declare nil tax. The rebate also covers only tax at the section 202(1) slab rates (section 156(3)), so capital gains taxed at special rates can leave tax payable even below ₹12 lakh.
What the form covers
The FAQs list nine kinds of payment: taxable EPF accumulated balance paid by the fund’s trustees, insurance commission, rent paid by a specified person, mutual fund and similar unit income, interest on securities, interest from banks, co-operative banks and post offices, interest from other specified payers, life insurance policy payouts, and dividends from Indian companies. That is why searches for “Form 121 for PF withdrawal” lead to the same form as FD interest.
Companies and firms cannot use it, and apart from the EPF row the payee has to be resident in India.
How to give it, and what changed from 15G and 15H
- One form per payer, every year. The FAQs say Part A must go separately to each payer. Rows 11 and 12 ask how many Form 121 declarations you have already filed that year and for how much income, so a second bank sees the total.
- Early in the year. The department advises submitting before the income is credited, ideally at the start of the tax year. The form does not undo TDS already deducted; that credit shows in your AIS and Form 26AS and is claimed in the return.
- PAN is mandatory and must be valid and operative. Seniors need proof of age.
- New field: your last two returns. Row 14 asks for the tax year, acknowledgement number and returned income of the previous two returns filed.
- Paper or electronic. Rule 211 allows either. The payer allots each declaration a 26-character Unique Identification Number in the format set by Notification No. 01/CPC(TDS)/2026 of 28 March 2026, uploads Part B by the 7th of the month after the quarter and reports it in the TDS statement in Form 140, according to the guidance note.
- Depositories from 2027. The FAQs note that from 1 April 2027, under Finance Act 2026, the form can also be given electronically to a depository for dividends, units and interest on listed securities held there.
If your deposits sit with more than one bank, the DICGC insurance limit is a separate question from TDS, and rates are tracked on our FD rates page.
